According to a report yesterday, fingerprint-enabled Apple Pay is coming to mobile websites. One popular angle on this news is that the move will potentially cut into PayPal’s leadership position; however, the more important potential impact is the acceleration of mobile commerce more broadly.
Re/code reported that Apple Pay for mobile sites will be available later this year, before holiday 2016:
The service will be available to shoppers using the Safari browser on models of iPhones and iPads that possess Apple’s TouchID fingerprint technology, these people said. Apple has also considered making the service available on Apple laptops and desktops, too, though it’s not clear if the company will launch that capability.
One of the big reasons that mobile commerce significantly lags mobile traffic is payment friction. According to GfK research, mobile devices account for only three percent of transactions in the US, though seven percent from younger mobile users.
A 2015 US Federal Reserve study on mobile payments and banking found that “22 percent of those with access to a mobile phone reported that they made a mobile payment in the last 12 months.” Those not using mobile payments/banking identified security concerns as the main reason why.
Mobile payment tasks for smartphone users, by mobile payment self-identification
Source: US Federal Reserve study 2015 (n=600)
According to a late 2015 survey by PYMTS.com, just under 17 percent of respondents had used or tried Apple Pay in the US. The biggest reasons for not using it wasn’t security. These respondents instead cited awareness (I forgot) and uncertainty about whether the store in question accepted Apple Pay.
Adoption of Apple Pay for in-store retail purchases has been limited in part because of slow or uneven retailer adoption. Retailers such as Walmart, Target, Best Buy, Kohl’s, CVS and others are part of a consortium trying to launch their own competing mobile payments platform called CurrentC. Walmart also recently introduced its own proprietary payments platform. And while CurrentC is destined to fail ultimately, its existence delays acceptance of Apple Pay or Android Pay by these major retailers.
Any system that removes the burden on the consumer to enter credit card and related information on a smartphone screen is certain to boost mobile transactions overall. Whether Apple Pay will help will in turn be dependent on retailer and developer adoption.
Whether using PayPal, Android Pay or Apple Pay, one would think that smart merchants and developers would want to make it easier for their customers to buy on mobile devices. But as history has shown, retailers and e-tailers often don’t do what’s best for their customers.